＜Research＞Citi Expects CM BANK (03968.HK) to Report Weaker-than-expected 2Q NP; Valuation Premium Difficult to Justify

　　CM BANK (03968.HK) -1.500 (-4.498%) Short selling $180.79M; Ratio 21.642% was under pressure this morning, and last descended nearly 4.6% to $31.8.

　　Citi Research issued a research report adding CM BANK into downside 30-day catalyst watch, as its interim net profit expected to fall by 1.5% YoY.

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　　Citi Research estimated that its 2Q24 net profit may be weaker than expected due to pressure on mortgage yield, deleveraging Chinese households, worsening retail asset quality and higher-than-peers bancassurance fee exposure.

　　As it is expected that CM BANK's 1H24 profit growth will not be significantly faster than that of the big 4 banks, Citi Research believed that it will be difficult to justify the premium valuation of CM BANK's H-shares, with a projected PB ratio of 0.81x, as compared with that of the big 4 banks of only 0.39x-0.42x.

　　Citi Research kept rating for CM BANK at Buy, with a target price of $41.52.

　　(HK stocks quote is delayed for at least 15 mins.Short Selling Data as at 2024-07-25 12:25.)

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